Toyota’s bungled global recalls has badly damaged its brand image, but while the carmaker faces its biggest crisis, analysts and experts say its reputation is by no means beyond repair.
The Japanese giant, the world’s biggest carmaker, has been almost constantly in the spotlight since January over a rash of defects that have prompted the recall of more than eight million vehicles worldwide.
But the company’s embattled president Akio Toyoda might be warmed to know that several high-profile firms in the past have recovered strongly from public relations disasters, sometimes even strengthening their positions.
Johnson & Johnson’s crisis management over poisoned Tylenol pills in the early 1980s turned the US drugmaker into a hero, say PR industry experts.
When seven people died after taking the cyanide-laced painkillers, the company issued a mass recall and a large media campaign, introduced new tamper-proof packaging and gave customers free replacements.
The difference, however, was that the recalls were issued swiftly, whereas Toyota has been accused of moving far too slowly.
On the other hand, big names like Coca-Cola and Exxon Mobil were heavily criticised in the past over delayed public action — although they managed to salvage their reputations.
Toyota may belong to this category, communications experts said.
“Recovery is much more difficult if you start off badly,” said Jonathan Hemus, who heads British consultancy Insignia.
“If an organisation seems to grasp the crisis really very quickly in the first few days, then actually it can be perceived more positively afterwards,” Hemus said.
“But if it takes a week or two to grasp the crisis, then it is a lot more difficult. So I think Toyota is in a tough position right now.”
Toyoda, the 53-year-old president who took the reins last June, shunned appearing publicly for two weeks after the recalls emerged in the United States, and his company was slow to admit the vehicle defects.
Acting quickly
He finally faced a roasting by US Congress last week and also appeared on CNN’s Larry King show, offering apologies but few details.
“Obviously, a situation like Johnson & Johnson — where they reacted very quickly, where they were prepared, had an immediate response and communicated very openly — is ideal,” said Deborah Hayden of Kreab Gavin Anderson Japan.
“But not every company, for whatever the reason, is as well prepared.”
However, even those that delayed their responses eventually recuperated.
Exxon, the precursor to Exxon Mobil, triggered an environmental catastrophe when a tanker unleashed a horrific oil slick in Alaska in 1989.
“When the Exxon Valdez sank off Alaska, it took something like a week before the president even talked to the media,” said Hayden.
“In the meantime the world’s television screens had been inundated with views of birds and animals covered by oil. It took them time, but they recovered,” she added.
And that could go for Toyota too she said: “Crises are very consuming and move very quickly. But you can get through them.”
Coca-Cola was also slow to respond to a case of contamination in Belgium in 1999 when dozens of school children were sent to hospital.
“It cost them hugely in terms of the cost of the recall, lost sales, damaged reputation and share prices falls. But ultimately it is still a very strong brand,” said Insignia’s Hemus.
Toyota’s efforts to regain lost trust will depend on its ability to cooperate with regulators, which it has pledged to do.
The carmaker will also face the arduous task of renewing ties with the political world and the media, as well as stakeholders, dealers, suppliers and motorists, experts warned.
“Toyota has lost the moral high ground in this issue and will need to find a way to ensure that safety remains its number one priority,” said Ray Rudowski, of management consultancy Hill and Knowlton in Hong Kong.
Toyota gave the impression of being a “slow, secretive company that may be sitting on a bigger problem”, he said.
“That’s a tough impression to shake off without serious and very transparent structural changes within the organisation itself,” he added.
Hemus said Toyota must shake off its smugness, which it enjoyed for decades as a quality company and as it surpassed US rival General Motors in 2008 as the largest carmaker in the world.
“The worst thing Toyota could do would be to simply breathe a huge sigh of relief when this immediate crisis ends and just continue with business as normal,” Hemus said.
“It was clearly business as normal which allowed this crisis to happen.” – AFP